Posted tagged ‘age’

I know its a tough labor market for young people and recent college grads, but they still represented a larger portion of new hires in NH in 2011 than would be expected based on the percentage of employment by age in the state. The chart below shows the age distribution of employment in NH in 2011 along with the percentage of new hires in the state by age group. Although job growth has been slow this recovery, the chart still shows that among those who have been hired for a new job (that is the hiring that is not a “call back” of a previously laid-off worker), younger workers make up a disproportionate number of the new hires.

This could be more evidence of, as well as a subset of, the “skills gap” debate. Many employers complain that the skills that young workers and recent grads posses don’t match their needs, and this is true for many occupations, but what this data also seems to suggest is that the mismatch between the demands of employers and those seeking work among the existing workforce is even greater than that for younger workers and new entrants to the labor force. It suggests a bigger problem than just getting kids into the right majors and training programs (although that is a big part of it). It points to a larger problem of a fundamental change in the types of occupations in demand (or the skills required of the same occupations) as well as a “twist” in the labor market that results in differences in the occupational make-up of industries. It is a much more difficult , slower, and likely painful process to have the existing workforce adapt to these changes in order to increase their employment prospects than it is to begin with the next generation of workers, although both will challenge future employment and economic growth for some time.

Of course it is possible that employers just prefer younger and perhaps less expensive workers and that is what accounts for their outsized share of recent new hires. Or it could be a function of the type of industries that were hiring in 2011 (I will be examining this hypothesis). It may be more comforting to view labor market trends from those perspectives but it won’t get us any closer to taking the personal and policy actions necessary to create greater alignment between the skills of our workforce and the skills needed for a more prosperous economy.

Like this:

The percentage of younger workers in the workforce is declining in NH, as it is across the country, but the trends are different for specific industries and occupations (more about that in a later post). Simply put, some industries are capturing a larger share of a smaller cohort of younger workers and the key for any industry or occupation is to have appeal for younger workers and students. How does an industry capture more younger workers? Is it because the industry is perceived as being desirable or “cool,” or do younger workers respond to signals about the opportunities in an industry or an occupation?

Manufacturing is one industry that has been capturing a smaller share of younger workers (government and utilities are others). The chart below shows that over the past 15 years the share of younger workers (age 25-34) declined in NH’s workforce (age 25-64). But the chart also shows that the drop was more pronounced in manufacturing than in the workforce overall.

Government employment hasn’t been perceived as cool for some time but job opportunities have grown or remained steady (except in very recent years) over the years suggesting that “coolness” is a factor in the career choices of younger workers. For manufacturing it is likely to be a combination o cool and opportunities. While manufacturers now have good opportunities for young workers, that perception must overcome decade s of labor market signals showing large declines in manufacturing employment. The decline in younger workers in manufacturing roughly corresponds to the change in manufacturing employment in the state (chart below).

Manufacturing employers are in a difficult position. Fewer households have workers with a history of manufacturing employment, limiting the legacy effects that can contribute to career choices. A “twist” (changing occupational makeup) in the manufacturing labor market mean that much of the public and almost no high school guidance personnel have an understanding of the types of jobs in manufacturing. A general lack of “coolness,” perceived lack of opportunities, and limited understanding of the opportunities that exist in the industry all mean that manufacturing will have a tough time capturing a larger share of the younger workforce, but it is important to do so for a number of reasons. I just don’t know if manufacturers can do it alone.